CSR Alone Doesn’t Build Loyalty, Study Finds Brand Equity and eWOM Are Key Drivers
A 2026 study by Muhammad Arif Abidin, Dina Lusianti, and Supriyono from Universitas Muria Kudus reveals that Corporate Social Responsibility (CSR) does not directly increase customer loyalty. Instead, the research shows that CSR strengthens loyalty only when it enhances brand equity and generates positive electronic word of mouth (eWOM). Conducted on consumers of PT Hayati and Craft Indonesia and published in Jurnal Multidisiplin Madani (MUDIMA), the findings highlight a critical shift in how companies must approach CSR to remain competitive in the digital era.
Why This Research Matters
In today’s globalized and digitally connected marketplace, consumers are no longer influenced solely by product quality or price. Environmental responsibility, ethical branding, and online reputation now play major roles in shaping purchasing decisions.
Indonesia, with one of the largest internet user populations globally, presents a unique environment where digital communication—especially eWOM—can significantly influence brand perception. However, many companies still treat CSR as a compliance requirement or branding formality rather than a strategic tool. This study offers timely evidence that CSR must be integrated with branding and digital engagement to be effective.
How the Study Was Conducted
The research used a quantitative approach, analyzing data from 168 consumers of PT Hayati and Craft Indonesia in West Kalimantan. Respondents were selected using purposive sampling, meaning they had purchased products at least twice and were aware of the company’s CSR activities.
Key aspects of the methodology include:
- Research design: Quantitative, hypothesis-testing
- Data analysis: Structural Equation Modeling (SEM) using AMOS software
- CSR (Corporate Social Responsibility)
- Brand Equity
- Electronic Word of Mouth (eWOM)
- Customer Loyalty
- Measurement scale: Likert scale (1–5)
This approach allowed researchers to examine both direct and indirect relationships between CSR and customer loyalty.
Key Findings
The study delivers several important insights into consumer behavior and marketing strategy:
- CSR does not directly increase customer loyalty,Statistical results show no significant direct relationship between CSR and customer loyalty.
- CSR significantly strengthens brand equity,Companies with active CSR programs tend to build stronger brand value and recognition.
- CSR boosts electronic word of mouth (eWOM), Consumers are more likely to share positive online experiences about socially responsible companies.
- Brand equity directly increases customer loyalty, Strong brands foster trust and repeat purchases.
- eWOM plays a major role in driving loyalty, Online reviews and recommendations significantly influence customer decisions.
- Brand Equity (strongest pathway)
- eWOM
In simple terms, CSR works—but only when customers notice it, value it, and talk about it.
Why CSR Alone Falls Short
The study highlights several reasons why CSR does not directly translate into loyalty:
- Limited public understanding of CSR, especially in rural or underdeveloped regions
- Consumer focus on business outcomes, particularly among B2B buyers
- Weak communication of CSR benefits, making initiatives less visible or meaningful
“CSR has the potential to increase loyalty, but its impact depends on how well it is communicated and aligned with customer values,” explain the authors from Universitas Muria Kudus.
Real-World Implications
The findings offer practical guidance for businesses, policymakers, and marketers:
For Companies
- CSR should be integrated with branding strategies, not treated as a standalone activity
- Invest in building strong brand equity to amplify CSR impact
- Actively manage digital presence and encourage positive eWOM
- Communicate CSR benefits clearly and consistently to consumers
For Marketers
- Focus on storytelling and digital engagement to make CSR visible
- Leverage social media to turn CSR into shareable content
- Align CSR messaging with customer values and expectations
- Encourage transparency and accountability in CSR programs
- Support public awareness campaigns to improve understanding of CSR benefits
For Researchers and Educators
- Expand studies into urban and digital-native populations
- Explore additional variables influencing customer loyalty
Author Profile
- Muhammad Arif Abidin – Researcher in business and marketing strategy, Universitas Muria Kudus
- Dina Lusianti, S.E., M.M. – Lecturer and marketing expert, Universitas Muria Kudus
- Supriyono – Academic researcher specializing in business management, Universitas Muria Kudus
Their research focuses on consumer behavior, branding, and the strategic role of CSR in modern business environments.
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